Divorcees could be liable for ex-partner’s debts

Divorced couples who thought they had made a clean break could now find themselves liable for thousands of pounds of debt if their former spouse is declared bankrupt, lawyers have warned.

A landmark ruling in the High Court means they are no longer protected from their ex-partners creditors even when their divorce settlement was ordered by a court.

Catherine Wenborn, family law specialist at Andersons Solicitors in Nottingham, said the court ruling applies retrospectively so people who divorced up to five years ago could also be affected. The case involved David and Wendy Haines who had lived at a house near Stourport-on-Severn in Worcestershire.

They divorced in 2003 and Mrs Haines received the house as part of the settlement ordered by the court. When Mr Haines petitioned to be declared bankrupt two years later, the bankruptcy trustees took legal action to set aside the divorce settlement. The High Court ruled in their favour which means that Mrs Haines may have to give back her husband’s share in the house unless he can repay his debts in some other way, even though they divorced four years ago.

Catherine Wenborn says the ruling overturns the concept that divorce settlements ordered by the courts could not be overturned by bankruptcy proceedings.

“It’s bad news for people who thought they had made a clean break and it’s likely to have a major effect of future divorce settlements where there is a possibility of one partner going bankrupt.”

Catherine Wenborn is head of the Family Department at Andersons Solicitors in Nottingham and can be contacted by telephoning 0115 988 6717 or emailing cwenborn@andersonssolicitors.co.uk.